New research – Trade deals with five key countries could take 26 years to negotiate

New research – Trade deals with five key countries could take 26 years to negotiate

Post published: April 03, 2018

It could take 26 years before free trade agreements with the United States, China, India, Australia and New Zealand all come into force, according to new analysis published today by Open Britain.

These countries are the most commonly cited by Liam Fox and other ministers as priority targets for free trade negotiations after Brexit. Research by Open Britain has calculated the average length of time it takes for each of them to secure free trade agreements, from the beginning of negotiations through to them coming into force:

India takes on average 6 years and 11 months;

China takes on average 5 years and 9 months;

Australia takes on average 5 years and 1 month;

New Zealand takes on average 4 years and 7 months;

and the United States takes on average 3 years and 9 months.

These add up to 26 years, meaning if the Government sought to negotiate with of each these countries consecutively, beginning in March 2019, it could hope to have deals with all five countries in place by 2045. Even then, the Government’s own analysis says a trade deal with the US would only benefit GDP by about 0.2% in the long term, with deals with other non-EU countries adding just a further 0.1% to 0.4% to GDP over the long term.

Liam Fox has said his department doesn’t currently have the capacity to negotiate major free trade agreements. This means the Government may not be able to take on more than one set of negotiations at the same time. In addition, it will likely be busy negotiating the free trade agreement with the EU well into the 2020s.

Commenting, Peter Kyle MP, leading supporter of Open Britain, said:

“As new information, like the enormous length of time it is likely to take to negotiate any new trade deals, comes to light, we all have the right to ask if Brexit remains the best choice for our country and to keep open the option of saying ‘no thanks’ to what Theresa May brings back from her negotiations.”

Lord Patten, former EU Commissioner, trade negotiator and leading supporter of Open Britain, said:

“Trade negotiations are nasty, brutish and long. After a hard Brexit the UK will not be in a position to dictate terms to major economies like the US and China.

“Under pressure from ministers to salvage something after Brexit, ministers risk being taken for a ride by President Trump and others who will insist we lower our food and environmental standards – and possibly open up our NHS – so that their industries can get a foothold in the UK.”

/ends

Notes to Editors

See the below for a full breakdown of all free trade agreements negotiated by the US, China, India, Australia and New Zealand. This shows the average length of time it takes for each country to secure free trade agreements, from the beginning of negotiations through to them coming into force. If negotiations were ongoing as of 20 December, or if they were complete but the agreement is yet to come into force, we have assumed 20 December as the implementation date.

Liam Fox has said his department currently doesn’t have the capacity to negotiate free trade agreements:

There is no reason to believe that the UK’s negotiations with any of these five countries will be abnormally swift. A quick deal with the US would mean Britain has capitulated and allowed American food and health companies full access to the UK market, including for products like chlorinated chicken and hormone beef, while achieving little penetration into the US market for Britain’s financial and other services industries.

In the case of India, to get trade talks started the UK would need to agree to grant more visas for India workers, something the UK government blocked in the EU-India FTA talks.

China, meanwhile, is deeply protective of its services sector. In return for any kind of trade deal, Beijing would likely want Britain to advocate for it to be granted “market economy status” at the World Trade Organisation.